House Bill increases the odds of a global pact to fight corporate tax havens
Itai Grinberg and Rebecca Kysar, the Treasury officials who led the global negotiations for the United States, argued in an essay last week that with a rate of 21%, “Jobs and investment can thrive in the states. -United “.
After a virtual meeting with her counterparts from the Group of 7 Nations last week, Treasury Secretary Janet L. Yellen said the higher rate “would generate funds for a sustained increase in critical investments in education, research and clean energy ”.
More details on these plans are expected to be released in early and mid-October. However, it is unclear how and when the United States would enact this part of the deal, known as Pillar 1, and business groups and Republicans are still concerned that American companies are paying the brunt of the new taxes. .
The October deadline is self-imposed and could be extended. Countries have set a goal of fully activating the deal by 2023, as it will take time for countries to change their tax laws.
The House proposal, presented by Democrats in the Ways and Means Committee, could still undergo substantial changes before a final vote. Ultimately, it will have to be merged with a proposal from Senate Democrats, who have yet to set a tax rate for foreign corporate profits.
Manal Corwin, a treasury official in the Obama administration who now heads Washington’s national tax practice at KPMG, said it was possible the rate could rise further despite the corporate downturn.
“You never know how these things play out when they need more income,” Ms. Corwin said.
Any change could be accompanied by adjustments to the House Democrats’ proposal for national corporate tax rates. Despite Mr Biden’s call for 28%, the House proposed a graduated structure, ranging from 18% for smaller businesses, with income below $ 400,000, to 26.5% for businesses with income taxable is greater than $ 5 million.